Date
29 May 2017
Chinese billionaire Zong Qinghou blames technological advances such as e-commerce and artificial intelligence for bringing chaos to the real economy. Photo: People.china.com
Chinese billionaire Zong Qinghou blames technological advances such as e-commerce and artificial intelligence for bringing chaos to the real economy. Photo: People.china.com

Why China’s beverage tycoon is blasting the internet giants

The internet economy led by Baidu, Alibaba and Tencent is thriving and getting a lot of attention.

However, Chinese billionaire Zong Qinghou, who is the founder, chairman and CEO of Hangzhou Wahaha Group, believes the internet economy is doing more harm than good to China.

Soon after Alibaba founder Jack Ma (Ma Yun) put forward his five new concepts – new retail, new manufacturing, new finance, new technology and new energy, which he regarded as keys to China’s future – Zong called Ma’s theory “nonsense” in a CCTV interview.

The beverage mogul stressed the future of China’s economy should be built on the real economy, and internet giants led by Alibaba have actually created chaos for the real economy.

For example, Zong said, e-commerce operators have been selling goods at dirt cheap prices, thereby ruining the pricing system of the real economy.

Zong’s blunt remarks about the new economy have made him a popular speaker in many business conferences.

In one instance, Zong and Baidu’s founder Robin Li (Li Yanhong) were both invited to one such forum. 

Li made a speech about how artificial intelligence would transform the real economy and improve productivity.

That prompted Zong to lash out at Li. He asked: “If all jobs are done by robots, what will humans be for, what can people do for a living?”

Zong said the real economy is the basis for making a country strong and its people rich.

The real economy is creating wealth, while the internet is nothing more than a technology and a platform, he added.

Last week, Zong was invited by Tencent to the latter’s Digital Economy Summit.

Zong asked Tencent founder Pony Ma (Ma Huateng): “Is the backbone of our internet system in the hands of Americans or our own?”

In asking the question, Zong wanted to highlight the fact that more than 90 percent of server chips used in China are made by US firms like Intel and Cisco.

He was apparently saying that China’s internet infrastructure is vulnerable to external attack.

In reply, Ma stressed that Tencent has put high priority on internet security and spent massive efforts in this regard.

But Zong repeated his question, creating an embarrassing moment.

As China’s richest man in 2012, some regard Zong’s open criticism of the tech industry as an indication that he has lost touch with technological advances.

Zong’s ranking on mainland China’s rich list slipped to 14th place last year.

On the other hand, China’s internet economy continues to thrive, with everyone singing praises about it.

It may not be a bad thing for someone like Zong to keep the technology bosses on their toes and remind them of the pitfalls ahead.

This article appeared in the Hong Kong Economic Journal on April 25

Translation by Julie Zhu

[Chinese version 中文版]

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RT/CG

Hong Kong Economic Journal columnist

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